Businessweek Archives

Commentary: A New Olympic Event: Greasing The Skids (Int'l Edition)

December 27, 1998

International -- American News: COMMENTARY

COMMENTARY: A NEW OLYMPIC EVENT: GREASING THE SKIDS (int'l edition)

Ah, the Olympics. Television rights are soaring, multinationals like Coke and Visa keep lining up to pay $40 million or more in sponsorship fees, and over the past two decades, revenues have multiplied fortyfold, to an average $1 billion annually. How long can purity of purpose and dignity of spirit survive in the face of all that money?

Documents emerging in Salt Lake City in early December suggest that the answer is: not long. According to these revelations, vote-buying has been a part of the bidding process for Olympic cities. International Olympic Committee PresidentJuan Antonio Samaranch responded by setting up an internal committee to investigate. But the problems at the IOC and other sports governing bodies run deeper than anything an in-house probe can cure.

The IOC, the world football governing body FIFA, and other athletic organizations remain nonprofit associations publishing vague financial accounts and making key decisions behind closed doors. The politics "are Byzantine," says John P. Snugdown, a sociologist specializing in athletics at the University of Brighton in England. "Open dis- cussion and transparency are needed."MUZZLED. TheOlympics scandal shows what happens when cronyism reigns. The octogenarian Samaranch handpicks the majority of the 115 members of the IOC, and most are named for life. Many members sit on each other's athletic committees. By secret ballot, these members choose the cities that will host the Games. As the Olympics have become more lucrative, competition to hold them has increased--and so has the incentive to buy votes. "Cities hosting the Summer Games receive $1 billion of our money," says IOC Director General Francois Carrard. "So the temptations to cheat are there."

After losing the bidding to Nagano, Japan, for the 1998 Winter Games, the Salt Lake Organizing Committee has conceded that it set up a privately financed $400,000 scholarship fund to help win the 2002 Games. Payments were made to some 13 people, including six relatives of IOC members. Salt Lake City's bid succeeded. Australian newspapers report that the Melbourne Olympic Committee also made payments during its unsuccessful bid for the '96 Games. Marc Hodler, the IOC official responsible for the Olympics bidding process, has charged in a meeting with reporters that blocks of votes can be bought for $500,000 to $5 million.

Samaranch responded to the scandal by setting up an internal inquiry staffed by his chief aides. He says an internal investigation will catch wrongdoers faster than an independent one. But with rumors swirling, the mostly American multinationals that finance the Games have remained silent. "We will maintain the confidence of our sponsors," says Carrard. With more companies queuing up for their Olympic rings than there are sponsorships available, no one wants to speak out and jeopardize their standing.

But corporate pressure could do much to encourage reform. Television accounts for half of Olympic revenues and 11 multinational sponsors for about another quarter.

"NBC and Coca-Cola could bring change overnight," insists Andrew Jennings, author of The New Lords of the Rings, a 1996 book highly critical of the IOC. "Instead, they just keep babbling on about how wonderful the Olympics are."

Even an independent investigation would help clear the air. When Canadian Olympic sprinter Ben Johnson was charged with doping, Jennings says, the Canadian government held open hearings. "Within a month, the entire problem of drugs in Canadian sport was deconstructed, and Johnson's ban reaffirmed," he says.CHANGING HISTORY. By contrast, the IOC refused on Dec. 13 to take away gold medals from East German swimmers despite recent funding by German courts of systematic doping. The IOC's rationale demonstrates its customary unwillingness to face unpleasant truths. If the Germans lost their awards, says Carrad, it would open a Pandora's box to an incalculable number of similar claims. "We cannot rewrite history," he says.

But bad news can't be swept away forever. After years of denial, police discovered widespread drugging at this year's Tour de France. Sponsors such as Festina, the Swiss watchmaker, were embarrassed, says Jennings. How long will Coke, NBC, and other Olympic sponsors like all this egg on their faces?By William Echikson